What Property Owners Need to Know About Security Deposits in Portland
To ensure the wellbeing of your property, we ask tenants to provide a refundable security deposit upon move-in. This security deposit amount can range anywhere from a few hundred to thousands of dollars. As a property owner, it’s important for you to understand how that security deposit is handled.
Industry sites like Buildium maintain that, “The security deposit has long been a bone of contention between tenants and landlords and property managers. Some courts are awarding double damages to tenants who sued their landlord for not returning their security deposit.”
In the Portland, OR market security deposits are usually the equivalent of one month’s rent. Occasionally, the deposit will be more based on a variety of factors such as how the tenant screening results, applicant’s personal credit, or information from a previous landlords.
All security deposits are kept in a separate escrow account from the property’s operating account, and are treated as money first from and belonging to the tenant. These are highly regulated and monitored accounts and cannot be interest bearing for anyone to profit off of these funds. Upon move-out, the deposits may be used to compensate property owners for abuses and conditions beyond normal wear & tear, including unpaid financial obligations. However, there is brewing conversation and debate at the city that would require all landlords to keep security deposits in an interest-bearing account with the interest gained being due back to the tenant when they move out. What a nightmare that would be from an accounting standpoint, which would create a massive overhaul of state agency regulation & rule of law, banking regulatory practices, interest rate variables between owners & landlord, and increasing financial expense to landlords to maintain and report. Tenants would also have to report the unearned interest income on their taxes, potentially their filing expenses or deductions.
Rumblings like this happen from time to time–even when they aren’t anything near a great plan—and it’s why our team of expert property managers is so closely involved in the process. We are always making sure that when there is a shift in the marketplace, our property owners know and can make educated decisions based on the latest information available. We also help mitigate some of that red-tape when it comes up—whether it be additional resources or expanded accounting.
Something as simple as collecting a security deposit can end up being a real headache. It’s one of the many things we manage for our clients so they can stay focused on the what and who in their lives that are truly important to them.
As your property management firm, we will always make sure that each of the follow is handled with the utmost professionalism, attention, and care:
We will always be up to date on the current policies and laws
We help you determine a fair security deposit rate and attract tenants who can pay it
We manage these funds in a separate account and handle all bookkeeping
We do extensive property evaluation reports before move-in and after move-out to assure the tenant is responsible for any damages at the property
We will always keep you informed on the latest changes in the marketplace, so you can make educated decisions, mitigating risk.
We all understand what a valuable tool security deposits can be to protect your property from damages. It’s important that those funds are handled properly and in line with current policy and regulations. Our team of property management experts makes this easy for you.
We’d love to speak with you about your property and your investment goals in the city. Our goal is to provide quality care for your property portfolio, while increasing its profitability. We look forward to jumping on a call with you.